Q&A: How Nigeria’s digital currency, eNaira, will work

On Friday, October 1, 2021, the Central Bank of Nigeria (CBN) will launch a centralised and regulated digital currency called the eNaira.

Ahead of the launch, the apex bank created a website detailing the activities and operations of the digital currency.

WHAT IS ENAIRA

eNaira is issued by CBN as a legal tender and it is also the digital form of the naira and will just be like cash.

WHAT ARE THE BENEFITS?

The digital currency is for everyone: individuals, households, businesses, non-governmental organisations (NGOs), religious institutions, and governments at all levels, as it enables customers to move money from their bank account to their eNaira wallet with ease.

Some of the benefits include diaspora payments, receiving financial support/intervention funds through the digital wallet; increasing customer base for financial institutions and businesses.

The eNaira will ensure transparency in taxation systems for governments; facilitate the instant cross-border foreign exchange to boost economic growth, and minimize fraudulent activities such as money laundering, and illegal money deals because of the trackable unique ID of each eNaira.

WHAT IS ENAIRA WALLET?

This is the digital storage that holds the eNaira. It is held and managed on a distributed ledger and it is required to access, hold and use eNaira.

DIFFERENCE BETWEEN DIGITAL MONEY AND PHYSICAL MONEY

The eNaira is the digital form of cash and is a direct liability on CBN, while the customer deposits are direct liabilities of the financial institutions.

HOW TO ACCESS ENAIRA?

To access the digital currency, you will have to download the eNaira app either on the Google play store or the App store.

HOW CAN YOU GET STARTED?

Individuals

1. Download the eNaira app;

2. Enter the invitation code received from the bank;

3. Enter minimum identification details (i.e., NIN, BVN, or know your customer (KYC)/anti-money laundering (AML) information, depending on the customer tier you are);

4. Enter other identification details such as name, place, date of birth, phone number, passport photograph, email and password);

5. Minimum ID is validated;

6. You receive a notification from your financial institution;

7. Log in to account

Merchants/businesses, these steps are required:

1. Merchant downloads eNaira mobile app;

2. Enter invitation code from the bank and validates it;

3. Enter minimum identification details (i.e., Full KYC as stipulated in the CBN’s AML/combating of financing (CFT) regulations.

4. Enter your tax identification number (TIN);

5. TIN is verified, enter other identification details (i.e., email, password, business category, legal business name);

6. Financial Institutions verifies application;

7. eNaira wallet created and activated;

8. Merchant and financial institutions receive a notification.

WHAT AMOUNT CAN YOU USE ON ENAIRA ACCOUNT?

There are different tiers for individuals, which include:

Tier one–customers without an existing bank account

1. Minimum account opening requirement: national identity number (NIN);

2. Daily transaction limit: N50,000;

3. Maximum cumulative daily balance: N300,000.

Tier two–customers with minimal spending abilities

1. Minimum account opening requirement: bank verification number (BVN);

2. Daily transaction limit: N200,000;

3. Maximum cumulative balance: N500,000.

Tier three–customers With regular spending abilities

1. Minimum account opening requirement: BVN;

2. Daily transaction limit: N1,000,000;

3. Maximum cumulative balance: N5,000,000.

Then for merchants and businesses:

1. Minimum account opening requirement: Full KYC as stipulated in the CBN’s AML/CFT regulations;

2. Daily Transaction Limit: N1,000,000;

3. Maximum cumulative balance: unlimited.

HOW TO FUND ENAIRA WALLET?

Individuals can fund their eNaira wallet by transferring physical money from their regular bank (e-banking app); and then the cash holder (bank) hands over cash to an eNaira verification agent/bank branch/CBN shared agent network expansion facilities (SANEF).

Thereafter, the agent transfers the cash equivalent to the customer’s eNaira wallet.

For foreign exchange (FX) deposit to eNaira wallet, the diaspora regular account holder, such as HSBC, logs in to your customer FX bank account; transfers funds into international money transfer operators’ (IMTO) FX bank account such as Western Union; and then transfer from IMTO eNaira wallet to consumer eNaira wallet.

Finally, CBN has assured Nigerians that the eNaira will not replace cash, however, it will be circulated alongside cash, adding that it will complement cash as a less costly, more efficient, generally accepted, safe, and trusted means of payment.